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At issue are the rights over the public plaza to the west of the Metrodome — and the new Vikings stadium which will replace it.

The Minnesota Sports Facilities Authority has now filed an answer to its very first lawsuit.

A little over a week ago, Minneapolis Venture LLC, the owner of a property that includes land over the Downtown East LRT stop and an underground parking ramp, sued, asking Hennepin County District Court to clarify who has rights over the public plaza to the west of the Metrodome — and the new Vikings stadium which will replace it.

According to Minneapolis Venture, which is connected to Bob Lux of Alatus LLC, owner of Block E, a use agreement allowing the public access to the plaza expires at the end of October; after that, the plaza would be unavailable for use for Vikings’ games. That would not only force crowds and concessionaires to squish everything onto Chicago Avenue but also put a huge crimp in the grand architectural plans for the new stadium, which show large happy crowds milling in the public plaza in front of the glass-fronted building.

The Authority’s side of the story is this: Back in 2003, the Minneapolis Community Development Agency (MCDA), the then-owner of what’s called the Downtown East property, entered into a 10-year “use agreement” with the Sports Commission, forerunner of the Authority, which operated the Metrodome. Its purpose was to preserve the public plaza as a permanent open space where fans could gather before events at the stadium and buy souvenirs and other doodads. The Federal Transit Administration contributed $1.5 million to build it, and what’s there now is a patterned sidewalk and a sculpture called “The Seven Seas” that looks like an updated fragment of the Roman Coliseum. (It also holds up part of the roof of the LRT station.)

Property sold

The MCDA sold the Downtown East property to Minneapolis, and then in 2007 Minneapolis, for some reason or other, turned around and sold it to Minneapolis Venture, LLC. The use agreement, however, was binding on all successive commissions or authorities running the sports arena and on any party who bought the property, the Authority argues.

The Authority claims, moreover, that even though the agreement expires in a few months, it binds the two parties “to negotiate in good faith the right to extend this Agreement to use the Concession Facilities and Premises so long as the Metrodome continues to operate as a sports arena.” But, of course, the negotiation could fail, and Lux and his co-investors could mean-spiritedly close the public plaza and dispatch the Seven Seas to the seven seas.

Behind this foofaraw, however, is another story. The Authority has been trying to buy the property, and it claims that the dispute is really about — no surprise here — the price. It is offering something in the neighborhood of $4.5 million, which is what the valuation is for property tax purposes. In fact, in 2011, Minneapolis Venture appealed its assessment and had it lowered to that amount. Now it’s asking the Authority to pay for $26 million to buy it.

High pricetag

How did Minneapolis Venture arrive at this nosebleed figure? Well, the group claims that after the agreement expires, it can build a private commercial real-estate development right on the public plaza. A rendering of the proposed development showed two L-shaped 10-story buildings, which would form a square. Running diagonally through the complex would be the LRT and its station. The development, which would block the new stadium’s view of the downtown skyline, could be worth as much as $26 million, according to Minneapolis Venture.

According to the Authority, Minneapolis Venture “knew that development was only intended on the northwest portion of the property, across the light rail tracks from the Public Plaza.” What’s more, Minneapolis Venture “committed” when it purchased the property to construct such a development within 18 months (a deadline it failed to meet.) In six years, it hasn’t built so much as a shed.

Michele Kelm-Helgen, chair of the Authority, who seems to have plenty on her plate these days, issued a press release declaring that “Minneapolis Venture is taking the stance that the public should grossly over pay for the DET land, and is threatening to terminate the use of the Public Plaza as a negotiating tactic.”

The Authority wants a judge to push the two parties back into negotiations over the agreement. Whether they’ll lead to anything more than a piling up of legal fees, however, is anybody’s guess.

Comments (3)

Having blown somewhere between $600 – $900 million out of the pockets of Minneapolis taxpayers (over the next 30 years – but does anyone really KNOW what the taxpayers are on the hook for ?), NOW they’re REALLY on the job, disputing all of $20 million or so.

Sounds to me like Venture has a good claim. What’s next, eminent domain ? Their problem seems to be that they have not curried favor with the “right” parties, so this profitable sale was not previously concluded and swept under the rug with no fanfare.

Why did MPLS sell this public property? Who’s idea was that? Lets not skip over this too lightly or quickly. If that deal was product of local corruption then the current owners can’t profit from it legally.